The greenback strengthened against most of its 16 major peers (NYBOT:DXH14) as central bank policy makers decided whether to begin reducing $85 billion per month of bond-buying, known as quantitative easing. The Turkish lira fell after local media said that sons of the economy and interior ministers and Halkbank’s chief executive officer were among those arrested as part of a corruption probe. Volatility among Group-of-Seven currencies declined from a two-month high.

“The market seems to be divided on whether the Fed will taper now,” Robert Lynch, a currency strategist at HSBC Holdings Plc in New York, said in a phone interview. “But it’s more complicated than that. There’re other measures they can take in terms of forward guidance, putting on parameters on QE to counter the perceived hawkish elements of tapering.”

The dollar slipped 0.1% to 102.89 yen as of 10:26 a.m. New York time, after touching 103.92 yen on Dec. 13, the strongest level since October 2008. It rose 0.2% to $1.3736 per euro. The 17-nation common currency fell 0.3% to 141.32 yen.

Price Swings

JPMorgan Chase & Co.’s volatility index for the currencies of the G-7 nations dropped to 8.36% after reaching 8.78% on Dec. 13, the highest level since Oct. 2.

The Czech koruna dropped for a fourth day as the central bank kept interest rates unchanged while maintaining intervention plans to control gains. It fell 0.6% to 27.708 per euro.

The Ceska Narodni Banka left the two-week repurchase rate at what it calls a “technical zero” of 0.05%, matching all 14 forecasts in a Bloomberg survey of economists. The bank maintained koruna sales to prevent the currency from gaining beyond levels it considers “near” 27 per euro.

“The Czech central bank can be proud of itself,” Thu Lan Nguyen, a currency strategist at Commerzbank AG, said by e-mail. “So far its intervention strategy has impressed the markets sustainably, bringing euro-koruna back to 27.60 without much intervention.”